Is Oyo state’s growth a cause for celebration?
Revenue growth in Oyo state. Source: Stears Business

What are the odds of broke Nigerian state governments paying 13th-month salary to their workers? The chances are probably quite slim, to be honest. 

But, last month, the Oyo state government, one of Nigeria's 36 states based in the southwestern region of the country, increased such odds. The state delivered a promise to give its workers a 13th-month salary.

This news was very rare and quite exciting because many private organisations in Nigeria do not even pay 13th-month salaries, which is a form of compensation in addition to an employee's 12th-month salary. 

 

Some takeaways:

  • Oyo State has grown its internally generated revenue (IGR) by four times in the last ten years. IGR recorded one of the fastest growth of 42% in 2020. Yet, federal allocations made up nearly 60% of its 2020 revenue. 

  • One essential contribution to Oyo state's IGR growth is tax, particularly Pay As You Earn (PAYE). Oyo's PAYE has nearly tripled in the last five years. But this is tax earned from all working residents who also deserve dividends of a growing administration, not the state's civil workers only.

  • Oyo state is like most states that earn more of its internally generated income from taxes. But some states like Kaduna earned higher revenue from its ministries, departments and agencies (MDAs) in 2020. This suggests that states' can improve their overall revenue by utilising available resources, including their MDAs.


Private sector aside, getting a normal salary can be hard for public workers, and extra remuneration is just downright unusual. For instance, the head of the civil service of the federation was reported to have advised civil servants to exercise caution in spending their November salary. According to her, there was a possible payment delay in their December remuneration. In Ondo state, workers are being owed as much as six months salary, which they now receive in percentages—sometimes as little as 30% of their monthly salary.

So, it was noteworthy when a public institution and a state government broke away from the norms of perpetual salary delays and non-payment. By the 29th of December, the state had kept its promise and paid the full basic salary (without allowances) of its workers' monthly remuneration. It's a commendable feat, especially when compared to Lagos state, the country's IGR giant, that pays 30% of basic salary to its workers in December. 

However, if you have been keeping up with Oyo state, you might not be so surprised at

This story is free to read Register for free or sign in to finish reading

Adesola Afolabi

Adesola Afolabi

Read Latest

Why are regulators struggling to approve the Seplat-Mobil deal?

PREMIUM - 12 AUG 2022

25/24: What do Nigerian governors see as the way forward for the country?

PREMIUM - 11 AUG 2022

Are Nigerians better off with a pension plan?

PREMIUM - 10 AUG 2022

Will higher interest rates encourage Nigerians to save more?

PREMIUM - 09 AUG 2022

Download our mobile app for a more immersive reading experience

Scan QR code
mobile download